Montrose Management District collections are 'void,' court says

Published 6:32 pm, Friday, December 2, 2016

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New LED lighting is planned along seven bridges spanning U.S. 59 in the Montrose area. The color-changing lights will replace broken lighting on the bridges that was popular with drivers and nearby residents.

New LED lighting is planned along seven bridges spanning U.S. 59 in the Montrose area. The color-changing lights will replace broken lighting on the bridges that was popular with drivers and nearby residents.

Montrose Management District collections are 'void,' court says

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A Harris County court has ruled that a local management district must reimburse commercial property owners in the Montrose area for money collected by the district, one of dozens in Houston that use such funds to promote economic development and make improvements to public areas in individual neighborhoods.

State District Judge Joseph "Tad" Halbach Jr. issued a finding on Monday that the original petition allowing the West Montrose Management District to begin making the assessments was not in compliance with state law. He said the "total amount of the assessment is void."

"The assessments paid by owners of real property within the district were not made voluntarily, but were paid under duress," the court wrote in a findings of fact and conclusions of law. No dollar amount was included.

It was the latest turn in an ongoing lawsuit filed in 2012 by a commercial property owner in Montrose accusing the management district of collecting assessments illegally and seeking its dissolution.

The district on Friday said it was limited in how it could respond because the case is still being litigated.

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"Until a final judgment is entered in this case, the district will continue to assert its position that the assessment petition was valid and that the district is in compliance with all laws relating to its assessment on property owners," a lawyer for the district wrote in an email. He said the district would "exercise its available legal remedies before this court or in further appeals."

Halbach's finding specifically pertains to the district's state-required petition that allowed it to begin making assessments on commercial property owners after it was formed in 2009. Residential property owners are not assessed.

Once the district was established, organizers were required to collect signatures from at least 25 commercial property owners in the area to begin making assessments.

The court found the petition, signed by 26 property owners, included some residential property owners who were not assessed and therefore "none of the levied assessments were valid and are void as a matter of law."

Management districts in Texas are created by the legislature for such purposes as supporting economic development, improving public safety and promoting revitalization.

Advocates say they help neighborhoods by making improvements the city might not otherwise fund.

"I think they've contributed to the quality of life for the Montrose area," said City Councilwoman Ellen Cohen, who proposed the legislation for the Montrose district when she was a state representative.

She cited the reintroduction of lighting on bridges that cross the Southwest Freeway and an esplanade-improvement program.

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The West Montrose Management District is part of the overall Montrose District. The greater district was created as a combination of the East Montrose and West Montrose districts.

Commercial property owners are assessed at a rate of 12.5 cents per each $100 of property value.